Rupee Edges Closer to All-Time Low Against the US Dollar Again

The Pakistani Rupee (PKR) continued its extremely volatile and bearish run against the US Dollar (USD) for another day after it depreciated by 56 paisas against the greenback in the inter-bank market today. It hit an intra-day low of Rs. 175.5 against the USD during today’s open market session.

The local currency depreciated by 0.33 percent against the latter and closed at Rs. 175.24 today after it posted losses of 91 paisas and closed at Rs. 174.67 in the inter-bank market on Thursday, 18 November.

The local currency has surpassed its former record low against the USD from 26 October when it closed at Rs. 175.27, and is only a touching distance away from its all-time low of Rs. 175.73 from 12 November.

The Rupee has lost 0.28 percent against the dollar on a Week-on-Week basis, and 2.09 percent and 9.64 percent on Month-to-Date and Year-to-Date bases respectively, according to Capital Stake.

Rupee Spillover

The current account deficit widened from $1.13 billion in September to $1.66 billion in October during the ongoing fiscal year on the back of a moderate decline in exports and remittances and some uptick in services imports, according to the State Bank of Pakistan. Additionally, high energy prices kept the import bill elevated despite a downtick in non-energy imports.

Economic analyst A. A. H. Soomro told ProPakistani,

Current Account is heating up despite depreciation and various demand-reducing measures by SBP and the government. These levels are not sustainable amid rising demand growth and stubborn food and energy prices. It’s time to curb the demand and protect the precious dollars.

The former Treasury Head of Chase Manhattan Bank, Asad Rizvi, discussed the Rupee’s interbank showing in a tweet earlier today. He said, “Yesterday, SBP called BANK HEADS & told them to avoid unnecessary buying of $ or breach limit. Banks R told 2avoid guiding importers or tell them to buy $ vs #PKR until it stabilizes.”

He added, “While, Net SBP FX RESERVES is down by $380mn. Market is likely to remain choppy”.

The PKR failed to post gains against the other major currencies as well and posted losses in the inter-bank currency market today.

It lost 44 paisas against the Canadian Dollar (CAD), 18 paisas against the Australian Dollar (AUD), and 15 paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR).

The Rupee continued its decrepit sway against the resurgent Euro (EUR) after it posted losses of 40 paisas against the eurozone currency. It also posted losses of 13 paisas against the Malaysian Ringgit (MYR) and eight paisas against the Chinese Yuan (CNY).

Surprisingly, it managed to post gains of 10 paisas against the Pound Sterling (GBP) in the inter-bank currency market today.

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